I hope your week is off to a wonderful start! I’ve been keeping a close eye on the markets for you. There is a lot of “noise” out there right now, but when we peel back the headlines, there is actually some very heartening news for anyone looking to buy, sell, or refinance this year.
The Fed and the “Solid” Economy
We recently wrapped up the latest Federal Reserve meeting, and while they decided to keep interest rates right where they are, the tone has shifted. Chair Jerome Powell noted that the economy is expanding at a “solid” pace. Essentially, the Fed is being patient. They aren’t in a rush to cut rates yet, but they also see lower risks of inflation spiking back up. For us, this means we are likely entering a period of much-needed stability.
The Affordability Turning Point
I am thrilled to share that for the first time in 15 years, wage growth is expected to outpace home price appreciation in 2026. We are already seeing the impact:
• Lower Monthly Payments: The median mortgage payment fell to $2,025 in December—the seventh consecutive month of improving affordability.
• Negotiating Power: This is my favorite part! Homebuyers are securing the biggest discounts off list prices in 13 years. In 2025, the typical buyer who negotiated below asking price saved an average of $31,592.
Gone are the days of the “pandemic frenzy” where you had to bid way over budget just to be considered. Today, nearly 62 percent of buyers are paying below list price. If you’ve been sitting on the sidelines, this is your signal that the ball is moving back into your court.
What’s Happening with Rates?
Currently, the 30-year fixed-rate mortgage is averaging around .85 percent lower than this time last year. While the bond market has been a little “fidgety” lately due to some manufacturing data and a partial government shutdown affecting certain reports, we are still hovering near three-year lows.
We are watching the 10-year Treasury yield closely; as long as it stays near the 4.20 percent mark, rates should remain relatively steady.
My Takeaway for You
Whether you are a first-time buyer, looking to move up, or an agent helping clients navigate this landscape, the message is clear: Patience is paying off. With record inventory and more flexible sellers, you shouldn’t write off a home just because it’s slightly above your budget—there’s a good chance we can negotiate a win for you.
I’m here to help you crunch the numbers or simply chat about what these trends mean for your specific neighborhood. Your financial well-being is always my top priority.
